There are countless posts detailing some of the nasty sides of being a researcher, in particular being PhD student. The famous blog PHD Comics provides comical, and often disturbingly close to truth, exposition of such pains.

But one that recently struck me, and one that is often left-out in the discussion, is one that, alas, comes with proper rigorous research. If you are doing rigorous research, chances are that one day you had to see something that you really wanted to be true destroyed by reasoning or data.

Proper research requires that every idea, no matter how strongly we want it to be true, has to be put to the test. This is how bad ideas can be spotted and improved upon, so that our theories can improve, as Karl Popper discussed at length in many of his work. And this process is precisely what distinguishes a book or a blog-post, from careful peer-reviewed publication. The others can put to test our most cherished ideas, and identify flaws.

While the strength, and the essence, of science, is precisely to rely on others (in reviewing committee, conferences, seminars, etc.) to do this careful examination, it is first and foremost the task of the researcher to examine their own ideas critically. And good researchers are precisely those who, no matter how they would like something to be true, are brave enough to admit that their wishes cannot always be realised.

It is a painful realisation: figuring out a calculation or a coding mistake, finding a counter-argument, looking at data that disproves the point we wanted to make.

Every good researcher has, or will, experience this painful even one day or another. And this one more reason why we, as a society, should be even more grateful to them for willing to sacrifice their cherished ideas on the altar of reality, and ideally take us with them along in their journey of intellectual progress.

Indeed, in those cities, taxis are a regulated monopoly. One needs to be licensed to become a taxi driver. The number of license is limited and must often be purchased at a hefty price. Not only that, but taxi drivers are also subjected to heavy procedures in order to get their license (e.g. the infamous Knowledge test, that requires London taxi drivers to know every street in London by heart).

Now come companies such as Über, that use a loophole (they cannot be hailed in the streets, use taxi lanes, taxi stations, etc.) to circumvent these regulations. So taxi drivers are protesting.

Why are taxi drivers protesting? Because the entry of competition is eroding the value of the taxi monopoly.

The cap on the number of taxis ensure that the demand for taxis is split among a limited number of drivers, such ensuring a decent revenue to them. So the monopoly sustains official taxis’ revenues by artificially restricting the supply of taxiing services. With new players coming in, offering better services (polite drivers, GPS pickup, feedbacks on drivers, etc.), some of the demand is going to shift away from taxis, thus lowering their revenue.

The problem is that most official taxi drivers bought a licence and underwent the heavy costs of the procedures because of the prospect of these guaranteed revenues, at a time where competing services did not exist. They are now stuck with this heavy investment that will not yield the expected return.

It is a tricky problem for politicians to solve for many reasons:

Taxi drivers are stuck with a bad investment. Their expected stream of income is now lower. As a result, the resell price of their license is also lower.

Taxi driving does not offer great prospect for professional reconversion, should they decide to abandon the profession.

Consumers greatly benefit from the increase in supply of taxis. In certain cities, the number of taxi licences is really insufficient to cover the demand for taxis (the idea for Über famously emerged when its creator could not find a taxi in Paris).

The price from these private companies is subject to competition, and is likely to go down over time, while prices for taxis are set-up by regulators and do NOT adjust to supply and demand.

Protests by taxi drivers are only increasing the notoriety of new taxi services (Streisand effect).

Governments are now stuck with this problem, which is essentially a consequence of the decision to organize taxi services as a monopoly in the first place (in NYC, the decision to make it a monopoly was taken during the Great Depression to avoid starving taxi drivers to drive too long hours on badly maintained vehicles). They are facing the same dilemma than whenever they decide to increase the number of taxi licences: to sort between the interest of the consumers, and the legacy interest of taxi drivers.

While many would agree that monopolies are bad for consumers, taxi drivers, who have put their professional lives at the hands of government regulation, are now stuck at the mercy of governments who may well decide to root for consumers, for once.

I think it is safe to say that self-help has turned into a huge industry, with many fads on which authors and consultants make good money. A market for gullability.

In such a universe, it was nice to stumble upon this article from Less Wrong entitled “Scientific Self-Help: The State of our Knowledge“. It dates back from 2011 but it is still interesting. An interesting point that it makes is that hardly any self-help method has been scientifically tested. As a result, even psychologists disagree widely about what works and what does.

The article concludes with a call to experimental psychologists to sort that mess up and test all those theories.

In the UK, the decision has recently been taken to equip all armed policemen with body camera. The Met Police Commissioner Sir Bernard Hogan-Howe was quoted saying: “I do acknowledge that we need to do more to build trust with the people of London and there are things that we need to learn from [Mark Duggan’s death].” So the idea is that wearing camera will hold armed policemen more accountable, and as a result build more trust in the public.

pandas are evolutionary mistakes and would probably go extinct even without human encroachment;

it costs us a lot to make them survive (including some weird monopoly rents for China, who rents the animals to zoos around the world), and that money could be better spent.

What is important to think about is the opportunity cost of saving pandas. So much could be done with that money, including saving other species that can actually be saved or, you know, buying mosquito nets for families in malaria-ridden areas of Africa.

As we approach the one year anniversary of the London 2012 Olympics (sorry, Londinium MMXII), the debate starts to rage about the legacy of the Olympics. UK government claims that the Olympics boosted the British economy by nearly £10 billions. Proponents and participants of all parts are quick to claim that the Olympics created a lot of business opportunities, and created jobs for firms that would have otherwise gone under.

But for any person willing to address the question rigorously and without passion, nothing is so sure. Anyone who listend to last edition of BBC Business Daily will have noticed the economist there was the only one being cautious and explaining again and again the concept of opportunity cost: the billions in cost could have been spent in a very different way that may have yielded better results.

The concept of opportunity cost does not seem to be understood by the parties involved.

To which I’ll add:

The revenues generated have all been concentrated in London and in certain sectors.

There was no citizen debate about London’s application.

Disputed figures

Although it is rather easy to compute the costs, because they are clearly logged, it is much harder to computer the revenues and opportunities created by the London Olympics. To do one has to get ballpark figures by making some assumptions. And it seems that whenever assumptions were needed, the authors of the report have consistenly erred on the side of bigger figures.

For instance, one needs to assess how much more extra expenditures was created by overseas visitors depending on whether the Olympics is the reason they came to the UK. And depending on their answer, weigh their expenditure accordingly. But the report uses an odd weighing, I’ll let you judge:

One seriously has to wonder why every pound spend by the visitors counts as 75p extra expenditure if they answered “Yes probably” but 0p if they answered “No, probably not”.

Or the fact that expenditure by domestic visitors is counted in the benefits whereas, as report briefly mentions “some of the domestic visitor spending will be displaced spending from elsewhere”. But nevermind, let’s just add it all.

The unsound methodology is also apparent in the report’s blurry definition of the assumptions used to compute baseline versus upper range figure. (Upper range basically assumes that most of the benefits will accrue in 2012-2020, as opposed to 2004-2012.) Strange is also the fact that one sector that apparently is doing well “Professional, scientific and technical”. I’m curious to know what is included in there. Because if scientific research is accounted as benefitting from the Olympics, there clearly is a flaw in the estimation procedure.

By now, it is fair to say that so many of these tiny points accumulate to give the distinctive impression that whenever assumptions were needed, the authors erred on the side of inflating the benefits. Considering that the costs are said to be £8.7 billions (exceeding the initial budget of course), it is oddly convenient that the final benefits figures reaches £9.9 billions.

How much investment would have happened otherwise?

This is the hardest question: disregarding the errors in the numbers, how much of those numbers can be causally attributed to the Olympics? The main example is investments. Some investments were clearly linked to the Olympics: the Olympic Park, the Olympic village, the Media Centre etc.

Some other investments, such as improvement of transport infrastructures, are a bit harder to attribute clearly. Think about the renovation of some tube stations, or the improvement of the M4 motorway. Such investments did happen in the preparation phase of the Olympics, but some of those investments would probably have happened anyway, just at a later date.

The Olympics act as a catalyst so that a lot of investment happen at the same time, which might indeed improve coordination and reduce overall costs. But to attribute all of those to the Olympics is fallacious.

The opportunity cost of the Olympics budget

If you listened to the last edition of BBC Business Daily, you’ll understand that none of the guests except one understands the concept of opportunity cost. That guest was Prof. Andrew Zimbalist, who recently co-authored International Handbook on the Economics of Mega Sporting Events (Edward Elgar, 2012). He was luckily of fresh rational dispassionate and methodologically-sound thinking about the event. The other guests, all very enthusiastic about the Olympics kept hammering him with different arguments in favour of the vent: the jobs created, the companies saved or the fact that people practise sports more frequently now, or anecdotes about people feeling part of something.

Prof Zimbalist’s answer to all those arguments could hold in one paraphrased sentence: No one denies those benefits, but one has to wonder how the £10 billions could have been spent otherwise and probably achieve even greater effects.

The idea is that if you are looking for economic benefits, organizing such an event is definitely not the most efficient way to spend money. But one always forget about all the things that could have been done with such big spending. For instance, if one wants to encourage people to practise more sports, it might be much much cheaper to organize a campaign for that, or change curriculum at school. If one wants to renovate East London, there must surely be more efficient ways than building an Olympic park.

Somewhat defeated guests finally had to resort to the their last argument: the feel-good effect generated by the events. The professor’s reply? No proof of long-term effect. And it might be not be worth the money for the short-term feel-good.

It seems that most scholarly studies on the benefits of such events cast a huge doubt on the long-term benefits of mega-events such as the Olympics or the Football World Cups.

If you asked people in the North of England whether they would like to give money to London, I am confident most of them would reply that the capital already enjoys a disporportionate amount of the national budget. Yet this is exactly what happened with the Olympics.

The one-year anniversary report makes very explicit that most of the benefits are concentrated in the London area, and in specific sectors (tourism obviously, but some stranger, like “Professional, scientific and technical”–maybe it includes sportsmen?).

But the burden of public spending was borne by tax payers across the whole country and across all sectors. This amounts to a giant redistribution scheme, where farmers from the North effectively paid money for the building of an Olympic park and the renovation of tube lines in London. While there are very good reasons to have redistribution in a country, it should be made explicit so that citizens know what they are in for.

Political consultation?

Bottom-line: it is times that people stop waiving economic benefits as an argument in favour of such events. Instead, one should ask their citizens if they are willing to spend that extra money just for the event itself and if they are willing to bear some of the redistribution burden.

As studies start to accumulate that de-emphasize the benefits of such big events, it is time governments stop assuming that they should apply to host such events, and ask their citizens if all this is worth it after all.